<form class="form-search" action="<?php echo $this->href('search/result') ?>">
<div>
    <input class="input-text required" type="text" name="q" value="<?php echo $this->query ?>"/>
    <?php echo $this->button($this->translate('search')->__('Search'), array(
        'class' => 'button btn-search',
        'type' => 'submit'
    ), 'button') ?>
</div>
</form>

<script type="text/javascript">
$(document).ready(function(){
    $blankLabel = "<?php echo$this->translate('search')->__('Search entire store...') ?>";
    $('.form-search .input-text')
        .blur(function() {
            if (this.value == '') {
                this.value = $blankLabel;
            }
        })
        .focus(function() {
            if (this.value == $blankLabel) {
                this.value = '';
            }
        })
        
    if ($('.form-search .input-text').attr('value') == '') {
        $('.form-search .input-text').attr('value', $blankLabel);
    }
})
</script>